American airlines have changed face more than once since the Wright brothers first took flight in 1903. Airplane crashes, international high-jackings, and ever-surging fuel prices have altered the conventions and practices of American airlines. The deregulation of American airlines in the 1980’s made larger companies bedfellows in mergers and left room for smaller companies to pick up the regional slack. But after the soaring economy of the 1990’s peaked and landed, American airlines have faced the task of constant cost-cutting while maintaining inefficient routes. And after the terrorist attacks of 9/11—which caused the FAA to cancel all domestic and foreign flights for the first time in history—American airlines had to handle public fears of airborne terrorist plots. Couple extra security costs with astronomically fuel prices and genuine global instability, and saving America’s airlines becomes quite a task.
Through it all, American airlines have managed a 3.6% growth rate during the new millennium—albeit nowhere near the growth rate of the nineties. In North America, the passenger growth rate hit 32.8% in a five month span (January-May 2003). Yet despite this promising news, Internet deals and small regional upstart companies have—much like deregulation in the 1980’s— sent the bigger companies running into each other’s sprawled arms. This time, however, American airlines are globally sharing the workload. Oneworld—a conglomeration of American Airlines and British Airways—and Star—an amalgam of United and Lufthansa—are two such examples. These global units attempt to ease costs by sharing routes and security codes; even sometimes marketing.
The Internet represents, perhaps, the largest predicament for American airlines. With emerging search technology and specialized websites subsisting off of travel reservations, finding the best value for airline travel is becoming increasingly easy. What disturbs American airlines the most is that not only are holiday travelers turning to websites like priceline.com or cheaptickets.com for the best airfare deals, but business travelers are also bypassing the old lines of communication.
How does this affect the consumer? Websites that allow travelers to efficient avenues to cheap airfare are doing brisk business, as well as streamlined American airlines like Southwest or Jet Blue. These companies use fewer routes to cut costs. The impact that technology and world events has on world travel depends on how the major American airlines respond to the surge in Internet price checking and smaller regional companies. Some major American airlines have attempted to control the regional markets by incorporating smaller airlines. This slack in competition could lead to increases at the ticket kiosk.
Another concern of American airlines rests in the advent of telecommuting and teleconferencing some businesses utilize to eliminate the cost of flying. The tapering of business air traffic will most certainly be passed on to the average consumer. The good news? Internet websites allow for prospective jet-setters to research and uncover the best value; which in turn regulates prices. American airlines may always have to battle fuel and labor costs, security, and consumer fears, but the major American airlines will have to embrace technology and stumble on a means to offer competitive prices to the American globe-trotter. Happy trails.
By Jean-Pierre Lacrampe